Testing hypothetical bias in a framed field experiment

Hypothetical bias is tested based on inter- and intra-respondent comparisons of choice behavior, applying a hypothetical and real choice experiment. The inter-respondent comparison commonly applied in the environmental and agricultural economics literature consists of a control group of buyers who are asked to hypothetically choose between conventional and organic beans and an experimental group of buyers who are endowed to purchase the same beans using an identical experimental design. Hypothetical bias is tested by comparing inter- and intra-respondents’ (i) hypothetical and real choices, (ii) preference parameters of the estimated choice models related to hypothetical and real choices, and (iii) hypothetical and real willingness to pay (WTP). Choices in the experimental group are highly consistent when switching from hypothetical to real choices for this study's homegrown goods. However, after being endowed, the price sensitivity of lower income households drops, suggesting a house money effect. WTP derived from actual purchases is higher than WTP based on hypothetical choices, indicating a negative hypothetical bias, but differences are only significant in the case of the inter-respondent comparison. Actual prices paid by respondents in the field experiment appear to be considerably lower than the estimated WTP values and yield a mixed picture of hypothetical bias.     

EU Food Safety Standards,Pesticide Use and Farm‐level Productivity: The Case of High‐value Crops in Kenya

This article provides an empirical analysis of the impact of European Union (EU) private food safety standards on pesticide use and farm‐level productivity among small‐scale vegetable producers in Kenya. We apply an extended three‐stage damage control production framework, accounting for multiple endogeneity problems, to farm‐level data collected from a random cross‐sectional sample of 539 small‐scale producers. Estimation results show that farmers producing vegetables for the domestic market use significantly lower quantities of pesticides than do export farmers. However, contrary to findings elsewhere, the econometric evidence here shows that both domestic and export‐oriented vegetable farmers in Kenya use pesticides at levels below the economic optimum. The results also show that the adoption of standards by export farmers does not have any significant impact on total pesticide use. However, adopter categories are distinguishable in terms of types of pesticide used, i.e. adopters use safer pesticides based on World Health Organization (WHO) classification. The third‐stage structural revenue model results demonstrate that adoption of standards has a positive and significant impact on revenue raised in vegetable production. Nevertheless, farmers producing for the export market are indistinguishable from those producing for the domestic farmers in terms of the total revenue earned from producing vegetables during the rainy season, on a ‘per acre’ basis. Although standards can potentially prevent resource‐poor smallholders from maintaining their position in the lucrative export markets, they can also result in positive changes in the production systems of those small‐scale farmers who adopt it, as shown by these results.     

Welfare impacts of maize–pigeonpea intensification in Tanzania

This article examines the driving forces behind farmers’ decisions to adopt improved pigeonpea and maize and estimates the causal impact of technology adoption on household welfare using data obtained from a random cross‐section sample of 613 small‐scale farmers in Tanzania. We use seemingly unrelated and recursive bivariate probit regressions to test the endogeneity and joint decision making of pigeonpea–maize production. A double hurdle model is used to analyze the determinants of the intensity of technology adoption conditional on overcoming seed access constraints. To address the impact of adoption on welfare, the article employs both propensity score matching and switching regression techniques. Results from bivariate probit models show that unobservable factors cause both decisions to be correlated but the finding does not support the conjecture that both decisions are made jointly. Overall the analysis of the determinants of adoption identifies inadequate local supply of seed, access to information, human capital, and access to private productive asset as key constraints for pigeonpea technology adoption. The causal impact estimation from both the propensity score matching and switching regression suggests that maize/pigeonpea adoption has a positive and significant impact on income and consumption expenditure among sample households.     

New directions in emissions trading: the potential contribution of new institutional economics

Once an arcane topic even among environmental economists, emissions trading systems have substantially increased during this past decade in the USA. Moreover, the implementation of these systems has necessitated increased involvement of professionals in many fields besides economics. This paper reviews the practical experience of the six major types of emissions trading systems, focusing on credit market development, participation and results, including transaction costs. Five more recent applications of emissions trading also are considered, as well as the possibility of inter-pollutant trading. While inter-pollutant trading has been successfully used for chlorofluorocarbons (CFCs), the applicability of this experience is probably very limited. Additionally, it would be highly premature to attempt an evaluation of these newer emissions trading systems, some of which have yet to be even partially implemented. In order to improve these latter and future programs, the paper considers the potential contribution of the New Institutional Economics (NIE) to emissions trading. The NIE is used to develop theoretical insights and a series of predictions about the performance of a range of emissions trading systems.     

Medical interventions among pregnant women in fee-for-service and managed care insurance: a propensity score analysis

This paper extends earlier research on the effect of managed care on the receipt of four medical interventions for pregnant women: ultrasound, induction/stimulation of birth, electronic fetal monitor, and Caesarean delivery. Propensity score methods are used to account for sample selection issues regarding insurance choice. Managed care enrollees are more likely to receive an ultrasound, which may be indicative of receiving better prenatal care. Managed care plans reduce the rate of Caesarean deliveries, but such limitations may be beneficial given the substantial medical evidence that Caesarean deliveries are over-utilized. The results indicate that insurance coverage does influence treatment intensity, but that utilization controls and provider financial incentives do not adversely affect care for pregnant women.     

Audio broadcast technology: Prospects in the USA

In the primary context of the USA, the authors discuss technological possibilities compatible with present equipment, which offer some limited improvements in audio broadcasting. They then analyse more radical possibilities which may greatly increase the number of audio delivery channels. Anticipating a substantially different audio broadcasting system by the year 2000, the authors outline the challenges presented by the various possibilities to public policy makers.     

Diversity in product symbolism: The case of female executive clothing

Many social roles are associated with and identified by product symbols. Yet, frequently, there is much ambiguity among consumers regarding which products denote a given role, and the specific products which communicate desired role attributes. The study examines factors influencing the diversity of clothing symbols associated with the female executive role. A conceptual framework focusing on role-related variables, aesthetic versus instrumental attitudes towards clothing, and information sources consulted in relation to clothing choice is developed and tested on data from a national survey of female executives.